Examlex
Factor.
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Nominal Interest Rate
The interest rate before adjustments for inflation, representing the face value of financial products.
Real Interest Rate
The interest rate that has been adjusted for inflation, showing the real cost of borrowing or the real yield on an investment.
Year 2 Dollars
Year 2 dollars refer to the value of currency adjusted for inflation to a base year's purchasing power, here implicitly indicated as "Year 2."
Year 1 Dollars
Refers to the value of money expressed in terms of the purchasing power of a specified base year, used to adjust for inflation over time.
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